MACRS 15-Year Property — Depreciation Schedule 2025 & 2026
15-year MACRS property covers land improvements, qualified improvement property (QIP), and certain retail/restaurant improvements. Depreciated over 16 tax years under the 150% declining balance method (IRS Pub 946 Table A-1).
Recovery period
15 years
half-year convention
Section 179 eligible?
Yes
Up to $2,560,000 in 2026
Bonus depreciation
100%
Post-OBBBA (on/after 2025-01-20)
What qualifies as 15-Year property?
- Land improvements — fences, sidewalks, parking lots, landscaping
- Qualified improvement property (QIP) — interior improvements to nonresidential buildings
- Qualified retail improvement property (post-TCJA rolled into QIP)
- Qualified restaurant property (post-TCJA rolled into QIP)
- Gas station building improvements and certain wharves
- Municipal sewers and data-handling equipment for telephone central offices
Source: IRS Publication 946, Table A-1. If your asset is not explicitly classified, consult Rev. Proc. 87-56 asset-class tables or default to 7-year property.
MACRS depreciation schedule — $250,000 asset
Worked example: a $250,000 property placed in service with no Section 179 and no bonus depreciation, showing the raw 15-Year MACRS schedule.
| Tax year | Rate | Deduction | Accumulated | Book value |
|---|---|---|---|---|
| 1 | 5.00% | $12,500.00 | $12,500.00 | $237,500.00 |
| 2 | 9.50% | $23,750.00 | $36,250.00 | $213,750.00 |
| 3 | 8.55% | $21,375.00 | $57,625.00 | $192,375.00 |
| 4 | 7.70% | $19,250.00 | $76,875.00 | $173,125.00 |
| 5 | 6.93% | $17,325.00 | $94,200.00 | $155,800.00 |
| 6 | 6.23% | $15,575.00 | $109,775.00 | $140,225.00 |
| 7 | 5.90% | $14,750.00 | $124,525.00 | $125,475.00 |
| 8 | 5.90% | $14,750.00 | $139,275.00 | $110,725.00 |
| 9 | 5.91% | $14,775.00 | $154,050.00 | $95,950.00 |
| 10 | 5.90% | $14,750.00 | $168,800.00 | $81,200.00 |
| 11 | 5.91% | $14,775.00 | $183,575.00 | $66,425.00 |
| 12 | 5.90% | $14,750.00 | $198,325.00 | $51,675.00 |
| 13 | 5.91% | $14,775.00 | $213,100.00 | $36,900.00 |
| 14 | 5.90% | $14,750.00 | $227,850.00 | $22,150.00 |
| 15 | 5.91% | $14,775.00 | $242,625.00 | $7,375.00 |
| 16 | 2.95% | $7,375.00 | $250,000.00 | $0.00 |
Rates from IRS Publication 946 Table A-1. Computed at build time — no hardcoded schedules.
With §179 + 100% bonus depreciation
For a $250,000 asset placed in service in 2026, electing §179 expensing (up to $2,560,000) plus 100% bonus depreciation on the remaining basis.
§179 deduction
$250,000
Immediate expensing
Bonus depreciation
$0
On remaining basis after §179
First-year total
$250,000
100.00% of basis
With §179 capped at the full asset cost and 100% bonus on the rest, a 2026 purchase can be nearly fully expensed in year one — subject to business-income limitations for §179 and placed-in-service date for bonus depreciation.
Section 179 and bonus depreciation — 2025 vs 2026
| Parameter | 2025 (OBBBA) | 2026 (indexed) |
|---|---|---|
| §179 deduction limit | $2,500,000 | $2,560,000 |
| §179 phase-out threshold | $4,000,000 | $4,090,000 |
| Bonus depreciation (post-2025-01-20) | 100% | 100% |
| Bonus depreciation (pre-2025-01-20) | 40% (TCJA phase-down) | — |
| Applies to this asset class? | ✓ §179 + bonus | ✓ §179 + bonus |
Source: One Big Beautiful Bill Act (signed July 2025) and IRS Rev. Proc. 2025-32 (2026 inflation adjustments). Pre-OBBBA property uses TCJA phase-down: 80% (2023), 60% (2024), 40% (2025 pre-1/20).
Common mistakes and gotchas
- QIP was mistakenly left at 39-year property in the original TCJA text ("retail glitch"). The CARES Act retroactively fixed this to 15-year, effective 2018-01-01. Amending older returns may recover missed deductions.
- QIP must be made by the taxpayer AFTER the building was placed in service; improvements at original construction do not qualify.
- External improvements (roofs, HVAC, fire protection, alarms, security systems) to nonresidential property became §179-eligible post-TCJA but are NOT automatically QIP — confirm which regime applies.
- Land itself is never depreciable. Only improvements to the land (grading, paving, fencing) qualify as 15-year.
Frequently asked questions
Is QIP (qualified improvement property) 15-year or 39-year?
QIP is 15-year property for tax years 2018 and later, after the CARES Act fixed the TCJA "retail glitch". Before 2018, it was 39-year property. Amended returns may recover additional depreciation for 2018-2019 if not already adjusted.
Can I use Section 179 for 15-year property?
Yes — QIP, land improvements, and other 15-year property are §179-eligible up to the 2025 $2,500,000 limit. Some improvements to nonresidential real property (roofs, HVAC, fire protection, alarms, security systems) were specifically added to §179 eligibility post-TCJA.
What is the 15-year MACRS schedule?
Under the half-year convention: 5.00% year 1, then declining from 9.50% down to 2.95% over 16 tax years (150% declining balance switching to straight-line when optimal). Full year-by-year rates are in IRS Pub 946 Table A-1.
Are parking lots 15-year or 39-year property?
Parking lots are land improvements and qualify as 15-year MACRS property. The building they serve (if commercial) is 39-year, but the lot itself is 15-year.
Other MACRS asset classes
MACRS 5-Year Property
5-year recovery · half-year convention · Table A-1
MACRS 7-Year Property
7-year recovery · half-year convention · Table A-1
MACRS 27.5-Year Residential Rental Property
27.5-year recovery · mid-month convention · Table A-6
MACRS 39-Year Nonresidential Real Property
39-year recovery · mid-month convention · Table A-7a
Sources
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